Food Inflation USA Coming

Food inflation will become America’s top crisis.

Reposted in part from National Inflation Association
NIA’s Top 10 Predictions for 2011

Starting a few decades ago and accelerating in recent years, America has seen a boom in non-productive service jobs, mainly in the financial sector. Most of these jobs were made possible by inflation. Without inflation, which steals from the purchasing power of the incomes and savings of goods producing workers, the majority of the jobs on Wall Street would not exist today and our country would be in much better financial shape because of it.

With most Americans in recent decades seeking non-productive jobs in the financial services sector because that is where they could access the Fed’s cheap and easy money, very few Americans sought jobs in the farming and agriculture sector. In the 1930s, approximately 28% of the population was employed in the agriculture sector, but today this number is less than 2%. Agriculture currently makes up only 1.2% of U.S. GDP, compared to the services sector, which makes up 76.9% of U.S. GDP.

There is currently a major shortage of farmers in the U.S. and a lot of land that was previously used for farming has now been developed with Real Estate. To make matters worse, agricultural products now trade on the international market and Americans must now compete against citizens of emerging nations like China and India for the purchasing of food.

Prices of goods and services do not rise equally when governments create monetary inflation. Inflation gravitates most towards the items that Americans need the most and there is nothing that Americans need more to survive than food and agriculture. As the U.S. government prints money, the first thing Americans will spend it on is food. Americans can cut back on energy use by moving into a smaller home and carpooling to work. They can cut back on entertainment, travel, and other discretionary spending. However, Americans can never stop spending money on food.

The days of cheap food in America are coming to an end. The recent unprecedented rise that we have seen in agricultural commodity prices is showing no signs of letting up. In the past few days, sugar futures reached a new 30-year high, coffee futures reached a new 13-year high, orange juice futures reached a new 3-year high, corn futures reached a new 29-month high, soybean futures reached a new 27-month high, and palm oil futures reached a new 33-month high.

We estimate that it takes as long as six months for rising agricultural commodity prices to be felt by U.S. consumers in their local supermarket. Even if food producers and retailers accept substantially lower profit margins in 2011, we are still guaranteed to see double-digit across the board U.S. food inflation in the first half of the year. That is correct, let us repeat, NIA guarantees that Americans will see double-digit food inflation in the first half of 2011.

Shockingly, except for Glenn Beck (who was kind enough to feature our food inflation report), absolutely nobody in the mainstream media is doing anything to warn Americans about the food inflation crisis that is ahead. In fact, left-wing groups like Media Matters (funded by George Soros) have been working tirelessly to try and discredit NIA’s research while reassuring Americans that they need not worry about food inflation. The truth is, when Americans realize that they can no longer take food for granted, we will likely see the outbreak of an all out food price panic with everybody rushing to the supermarket to stock up on goods before prices rise even further. The end result will likely be government price controls and empty store shelves, but NIA doesn’t project this to occur until later this decade.

Reposted from: More on this page.


Consider a move to the Philippines…



  1. If things get nasty here we have a family friend who is a security gurad for a financial business, he used to work as a security guard here at the house, we will hire him back for protection, we are walled and gated home. I purchased a revolver for him last time so he was armed.

  2. I was referring to Americans coming here, food for us Americans is still cheaper here or at least some of it is.
    And I agree for the average Filipino it wont be fun. I also suggest stocking up on non perishable goods while the prices are low. We are buying a lot of cereal in plastic packets and storing them in plastic bins. Then buying bags of rice to store in a safe dry place.

  3. I can’t agree that you can shelter in the Philippines from raising food prices.

    Agreed, prices for food will remain lower in the Philippines, as always. Agreed there has always been hunger in the Philippines. But the impact of higher food prices on the general population will be far more severe in the Philippines than it will ever be in the USA.

    Today in the USA Americans spend about 10% of their earnings on food, in the Philippines the average Filipino spends 60% of his earning on food, so, a 10% rise in food prices is 6 times worse in the Philippines than it is in the USA.

    Further, as incomes rise, discretionary cash increases much faster. What this means that if you are at the median income level in the USA you still have far more cash left over after food prices rise to buy, for example, less processed foods or eat out less. You have cash to invest in food preserving systems that will allow bulk purchasing, lowering the initial costs of food in exchange for labor at home. Once you are earning less than $2 a day, you are already cutting all the corners you can to feed your family, you simply have no place to go.

    What this means to people who live in the Philippines is that those who today are hungry, are going to get a lot hungrier, along with a far larger section of the population who have not known sustained hunger in the past. My thinking is that these hungry people will not go softly into the night but demand change, first from politicians, and when there is no more government money to buy food, simply take what they need ignoring the law.

    The “Arab spring” was not fueled by a desire for democracy that is so widely publicized in the press but an end to the corruption that was seen as the reason for high prices of flour, cooking oil, and sugar.

    Take a lesson from the hungry in north Africa, and think what will happen to your homestead along the beach when it becomes obvious to the hungry that far too many are law breakers (protesters, rioters and outright thieves), and that it will be impossible to be put in jail.

    Who will be the targets of those desperate people? For sure the market will be guarded with well armed policemen. For sure those with political influence will be able as they are today to pay for police protection. But those in subdivisions or rural settings are far more difficult to protect. Police along with other government workers will be just as hard up, thus fueling even higher pressures for them to use their privilege to extract even more from those who are politically disconnected.

    A large component of the end price of food products is the cost of getting that food from the farm to the customer. Fuel prices are indeed rising, and fuel is at least half the price of raising and transporting food. For example Duran is P60 a kilo in Butuan, and P500 a kilo in Manila. Anybody who has gone into rural regions will know that in each place specific items are far lower in price. Cities are there as opposed to farm land because of the efficiency cities offer in producing, trading, or shipping goods. This efficiency is balanced on a system of providing food, fuel, raw materials and water to that city. When fuel prices rise products made in cities become more expensive, and as more expensive, fewer are sold, fewer are made and fewer people are employed to make them.

    Those unemployed people will go to the countryside where food is cheaper, or they can raise their own. Virtually every person in Manila has a relative who lives in a farming community.

    The problem with this is that there is no food surplus today in the countryside. There are no surplus land of soils suitable for gardening. The result will be waves of desperate migrants, overwhelming the already meager supplies in the countrysides. Just as the Japanese were knows for inhuman acts during the war because they acted as though “they had no neighbors”, neither will these migrants be well known in their new places.

    If you read “the good earth” you can see how this has happened in China, and a first person narrative of one who experienced it.

    It is obvious that you in the Philippines will not be able to close the door and avoid the suffering outside because you can buy the food they cannot.

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